1) Firm XYZ operates with a cost function: C(q)=15+10q3q2+q3 A) Give equations for the marginal cost, average total cost, variable cost and fixed cost functions of Firm XYZ. B) Calculate the costs in part A) for the following three output levels: 2,4,5. 2) Define the concepts of increasing and decreasing returns to scale in 1-2 sentences. 3) Give an example of a production function which has decreasing returns to scale and show that it has decreasing returns to scale. 4) For a firm operating and making profit in a competitive market in short-run equilibrium: A) Show marginal cost, average total cost and average variable cost curves on a diagram. B) What is the profit maximizing condition for the firm? C) Show the profit maximizing price, quantity and profit on a diagram. D) Give an example situation where the fixed cost of production increases. Show the effect of this increase on a diagram. What happens to price, quantity and profit? (use a diagram) E) Give an example situation where the variable cost of production decreases. Show the effect of this decrease on a diagram. What happens to price, quantity and profit? (use a diagram)